{"id":39785,"date":"2018-08-21T07:56:44","date_gmt":"2018-08-21T11:56:44","guid":{"rendered":"https:\/\/www.escapeartist.com\/?p=39785"},"modified":"2020-10-08T10:01:45","modified_gmt":"2020-10-08T15:01:45","slug":"opening-a-business-in-mexico","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/opening-a-business-in-mexico\/","title":{"rendered":"Opening A Business In Mexico"},"content":{"rendered":"

Opening A Business In Mexico<\/strong><\/h2>\n

As of today, October 6, 2020, the US Dollar reached 21.52 Pesos in Mexico and experts are estimating that the dollar will only go up in the coming days. In recent years more and more Americans have taken advantage of this spike in value by vacationing in Mexico, crossing the border to shop, and even starting a life south of the border.<\/p>\n

American businessmen and women have benefited the most from the current state of the dollar in Mexico as more and more companies are starting to open operations in Mexico. Forget all the hype around Trump\u2026 that just applies to import\/export businesses. If you are in the service business, our operate online, then you can move to Mexico without any new tax costs.<\/p>\n

Since NAFTA, many of the restraints placed on Americans seeking to operate or invest in businesses in Mexico have been erased. The process will become even easier in the upcoming years as Mexico is starting to recognize the necessity of foreign investment. Foreign investment in Mexico reached 15,645.2 million dollars in the first half of the year, an increase of 8.8% compared to the preliminary figure for the same period of 2016<\/a>.<\/p>\n

Mexico is the easiest country in Latin America<\/a> to start a business as it’s faster and much less complicated to do so. In some cases, it only takes a day<\/a> and zero dollars to begin running your own company. Still, there are some steps that you must complete in order to comply with the Mexican rules and regulations established to help you begin.<\/p>\n

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1. Submit A Request To The Ministry Of Foreign Affairs<\/b> (SRE<\/a>)<\/h3>\n

The first step in creating a company is to submit a request to the Ministry of Foreign Affairs where five possible business structures are listed in order of preference for the company. This is done to ensure that there is no company already established in the country with the same corporate name.<\/p>\n

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2. Draft The Constitutive Act<\/b><\/h3>\n

Once the SRE gives approval and determines the applicable Business Structure, the Constitutive Act must be created. This document is the one that gives life and stipulates all the general and basic aspects of the company: company name, objective, type of company, administration, duration, etc. Once the company is created, the Constitutive Certificate must be notarized before a Notary Public.<\/p>\n

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3. Register At The Tax Administration Service<\/b> (SAT<\/a>)<\/h3>\n

When the Constitutive Act is created and legalized the next step is with the Tax Administration Service, the Mexican equivalent to the IRS. From this register, the Tax Identification Number is obtained, which contains the Federal Taxpayer Identification Number (RFC).<\/p>\n

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4. Register At The Public Registry Of Property And Commerce<\/b> (RPPC)<\/h3>\n

The next step is to appear before the Public Registry of Property and Commerce in the state and city where the company will be registered, as well as its purposes, objectives, and commercial goals. For this process the presentation of the Constitutive Act is required, the RFC, and the power of attorney that allows the legal representative to carry out actions for the company.<\/p>\n

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5. Register With The Mexican Institute Of Social Security<\/b> (IMSS<\/a>)<\/h3>\n

Next is to subscribe to your business to the Mexican Institute of Social Security. Even if it is a company in which only the employer exists as the only worker since it will be necessary for him to make his personal contributions to his Social Security accounts. Also, if you have not done it in time, you may be liable for a fine by the IMSS.<\/p>\n

Registration before the other required Government offices. Depending on the commercial activity that the company will perform, you may be required to register with different government organisms, the most common being: Ministry of Health<\/a>, Secretariat of Ecology and Environment<\/a>, Mexican Institute of Industrial Property<\/a>, etc. At this point, you must also fill out all municipal or state permits that are required in the geographical area in which you seek to establish.<\/p>\n

It is worth noting that, as in the United States, there are many grants that the government gives to new business, you\u2019ll have to look up and see which one applies to your type of business.<\/p>\n

Handpicked Related Content: Doing Business In Mexico<\/strong><\/em><\/a><\/p>\n

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Tax Considerations<\/b><\/h2>\n

The corporate tax rate in Mexico is 30%, much higher than the United States thanks to President Trump. Even so, many US export service businesses are moving to Mexico<\/b> for lower wages and overhead.<\/p>\n